vegas. florida still has a lot of problems. michigan has problems. that related to the michigan economic circumstances. so it is concentrated. the most significant problems are concentrated. the solutions have to be concentrated. host: bruce morrison, former congressman of connecticut and member of the bipartisan policy center. guest: my pleasure. host: now we take you to the national press club where senator schumer will speak. [video clip] >> i want to thank you for coming and those joining us on c-span. i am a member of the newsmaker committee of the national press club. on behalf of the national press club, we are honored to have with us today the senior senator from new york, charles schumer. the senator will address the topic of tax reform.

most people thought the world was flat and anyone sent on a journey would likely go off a cliff. columbus bar defined a new route. today we are going to be exploring new routes to tax reform and how to avoid the fiscal cliff. the senator will talk for approximately 20 or 25 minutes. and we will open up the conference to questions. >> there is perhaps no issue

facing congress that is more complex man tax reform. for all the disagreements on taxes, most policy-makers and what the broad outline of tax reform might look like when you ask them is you get a startling difference in dramatically lowering the rate of broadening the tax debate. -- bess. -- base. ronald reagan and the 1986 congress created this. in the upcoming talks on the fiscal cliff, we should scrap this. the old style of tax reform is obsolete in a 2012 world. it does not fit the times

because there are two new conditions that did not exist in 1986 but are staring us in the face today. first, a much larger and much more dangerous deficit and second, a dramatic increase been income and inequality. old-style tax reform could make both conditions worse. but don't dismiss the old framework lightly. credit for the 1986 reform law begone -- belongs to democrats like bill bradley and the senate. just as much as to president reagan. as a member of the house back then, not only voted for it, fight with the votes to make sure it passed. i was on the committee set up by dan rostenkowski to get it done. the approach but a good deal of sense at the time. then as now, the code was littered with agrees is loopholes that needed to be reform.

recall the so-called passive loss schools that were in place but then. they allowed wealthy taxpayers to gain the system. someone could invest in a bowling alley and then, if the bullets lost money, they could take a ride up many times larger than their initial money and what of their entire income tax liability. we need to get rid of such a gimmicky tax shelter. puring these loopholes allowed us to turn to cut rates. at the time, that made sense, too. while it is critically important to insure that everyone, especially those at the top pay their fair share, 50% top federal tax rate is what we have until 1986 and that was admittedly to hide. yes, reagan-style reform worked over 25 years ago. as a result, it still has a great deal of appeal to some of

the most serious fiscal thinkers in washington. this includes the gang of six, recently expanded to a gang of eight which last year published a white paper based largely on the 1986 model. some of them are among my best friends in the senate. if you asked me how a compromise might ultimately emerged during the lame-duck session, i would say they're taught represent perhaps our best hope right now to achieve a bipartisan deal. leaders on both sides are actively encouraging talk. i certainly am. i hope they can revisit their approach to tax reform. our needs today are different compared to 1986. we cannot take the same approach as we did that. must reduce the deficit which is strangling our economic growth of long term. we must seek to control or rise

in income inequality which is hauling out the middle-class. 1986 model would be ineffective if not counterproductive to solving these two challenges. let me explain why -- first, with regard to deficit- reduction, tax reform 25 years ago was revenue-neutral. it did not strive to cut the debt. today, we cannot afford for it not to permit a national debt is apartment 73% of gdp which is nearly double what it was in 1986. it would be a huge mistake to take the dollars we gain from closing loopholes and put them into reducing rates for the highest income brackets rather than into reducing the deficit. that is what i want to say here today. to fix the deficit, we of course need to cut spending. the budget control act and a down payment of $900 billion in domestic discretionary cuts.

on top of that, as democrats are committed to finding a significantly more savings as part of a grand bargain including serious reform to entitlements. in addition to more cuts, we also need to bring in more money. the president's budget has called for around $1.50 trillion in revenues over the next decade. the revenue side of the federal ledger is underperforming by historical standards. for three years, we have had revenues coming into the federal government at a level around 15% of gdp. that is a 60-year low. since 1960, we have never had a balanced budget in a year when revenues were less than 18% of gdp. in 2001, the last year we had a surplus, revenues were at 19.5% of gdp. we have a revenue problem. in the tax reform to sell it. some on the left have suggested

corporate tax reform could be a source for new revenue but here i disagree. to preserve our international competitiveness, it is imperative we seek to reduce the corporate rate from 35% and do it on a revenue-neutral basis. this will boost growth and encourage more companies to reinvest in the united states. corporate tax reform, under the leadership of chairman baucus senator hatch should be treated separately from our attempt to get a handle on the deficit. but when it comes to the individual side of the code, our approach must be different. in this part of reform, the new money we collect from broadening the tax base cannot all be applied to prepare -- to reducing rates or else we will not get enough revenues to strike an agreement on deficit reduction. using tax reforms to produce revenue department 1986 model.

some still have not accepted as reality. they believe the dollars from loophole closing should all be used for reduction rather than deficit reduction. ed kleinbart at the joint committee for taxation reason i had a message for these holdouts. he said "we have to abandon our nostalgic for the tax reform act of 1986. that tax reform effort was revenue-neutral because it could afford to be. the fact that we have to raise revenue today means this tax reform effort will look different." he was right on the money. in 1986, tax reform was an end unto itself designed to make the code simpler and flattered. this time, it cannot ignore the most dangerous fiscal problem we face, our mounting deficit.

ok, fine, say well-meaning conservatives. all we have to do is broaden the base. [no audio] hold on a minute. there is a second factor we must consider when we approach tax reform. it is the staggering rise in income inequality. in 1986, there were certainly well accommodation at the top but not to the degree now. in the mid-1980s, we had come of it. dating back to world war two that saw the largest expansion of the middle class in american history. since then, however, middle- class wages have stagnated. in fact, the last decade was the first since world war two when median family income actually declined and that that continues, that has grave implications for the entire future of this country.

which has been founded on the basis of an expanding pie. according to the congressional budget office 30 years ago, the top 1% of households receive 7.4% of national income. today, the share of income to those same households has jumped more than 50% to 11.5%. according to one study looking at data up to 2007, just before the recession, the average income for the top 1% of taxpayers for by a whopping 241% over the last 30 years. average income for the bottom grew by nearly 11%. according to a 2011 study, the net worth of the walton family, not the tv folks, is equal to the bottom 30% of the country. one family has the same well as 1/3 of all the people in

america. the 1986 reform law actually did work to make the code somewhat more progressive. it reduced the tax preference for investment encompass some. subsequent changes to the code, in particular the 2001 and 2003 tax cuts and did that work. the capital gains rate was reduced all the way to 15% giving a large advantage to those in the highest bracket. high-income earners also gained the most from president bush across the board tax rate cuts. according to the tax policy center, last year, the bush tax cut increased after-tax incomes for people making over $1 million by an average of 6.2%. that is about 120 to die now -- about $129,000 per household. the increase was only 2.2% for those earning $50,000.

over time, our tax code has widened the nation's wealth gap. reversing this trend should be a top goal of tax reform. at a minimum, we certainly should not make the tax code and a less progressive than it would be if the high income tax cuts expired. in 1986 -- a 1986-style approach that promises up from rate cuts to the wealthy is almost guaranteed to give middle-income earners the short end of the stick. the reason is, in order to raise enough money to reduce rates and cut the deficit, you would need to slash deductions and credits on a far greater scale than we did in 1986. middle income earners would not be scared. -- spared.

because middle-income earners rely on these expenditures, the cost of losing that likely exit the benefit they would receive from a lower rate. multiple experts have verified this. the joint economic committee analyze the tax reform plan contained in the house republican budget offered by paul ryan. it found that in order to provide a lower top rate of 25% for high-income taxpayers in a way that does not add to the deficit, the elimination of expenditures would result in a $2,681 annual tax increase for a married couple with joint income of $100,000. that is unacceptable. the non-partisan tax policy center reached of the same conclusion about a similar plan promising a 20% across-the-board tax cut. under such a plan, the center said the average household with children earning a to a thousand dollars or less would face an

effective tax increase of $2,041. that is very similar. there's a lesson to absorb from the study. the where tax reform plans that only gets specific about what top rate they want to lock in. is also generally true that the lower the rate that gets promised, the fewer the details that get provided about the rest of their plan. simpson balls promised the top rate between 23% and 29% but take a hard look at how this would be accomplished. they presented an illustrated plan with 28% paid for by deep cuts and the plan raised significant revenue appears. it would generally help reduce our deficit but it raised taxes and milken -- income families with households making around $100,000, giving a tax increase

of over $1,000. under the simpson-bowles plan, high-income households -- would face a smaller tax increase. senator twomey went further. he offered a 28% top rate with few details on what would happen to expenditures. the house republican budget offered by congressman ryan proposed the lowest top rate of all, 25% and left a huge holes and the rest of the plan, the better to disguise its impact on the deficit and the middle class. the promises of lower rates amounts to little more than happy talk when the matter behind them does not add up. there risk for serious policy makers is, it up front rate cuts are the starting point for

negotiations on tax reform, it will box us in on what else we can achieve. certain lawmakers will pocket the rate reductions and never followed through on finding enough revenue elsewhere in the code to reduce the deficit or, if they do, it will almost certainly come out the pockets of the middle-class earners. this is the trap of traditional tax reform. we must not fall for it. it is an alluring prospect to cut taxes on the wealthiest people, reduce the deficit, and will the middle class harmless. the mass dictates that you cannot have it all. arithmetic, as president clinton said. the reality is that any past or on tax reform that promises to cut rates will either end up failing to reduce the deficit or failing to protect the middle class from a net tax increase. you can, at most, achieved two

of these goals. anyone pushing a plan purporting to accomplish all three is not telling the truth. the sooner we are honest with ourselves about this, the easier it will be to negotiate an actual compromise on taxes and on deficit reduction. in 1986, we chose to cut the top rate and protect the middle class. we did not seek to reduce the deficit. simpson-bowles seeks to cut the top rate and reduce the deficit but did not shield the middle class. we need a third approach that project -- prioritizes reducing the deficit and protecting the middle class and is willing to forgo a reduction in the top rate and that is what i am proposing today. what should this proposal look like? it would have three principles -- first, as in 1986, it still

makes sense to reduce the number of expenditures in the code to the extent possible. in figuring out which credits and deductions to eliminate, we must draw a line when it comes to protecting the middle class. we must understand that many of the expenditures in the tax code are not loopholes at all. tax preferences, things like a college education and retirement savings belong in the tax code even after reform happens. they were put in the code on purpose, to make a middle-class lifestyle accessible and sustainable for american families. tax reform recognized this in 1986. even as we cleared out the underbrush of loopholes, which preserved versions of the mortgage interest deduction, the charitable deduction, the state and local property tax deduction. realized that as much as we want to make the code more efficient, these provisions were two essential to middle-class

households. we have to abide by the same principle today. if we seek to protect the expenditures that are most essential to the middle-class, we still hope to reduce the deficit and we will need to find alternative revenue sources. this leads to the second principle of this new model for tax reform -- the tax rate for the highest earners should probably return to clinton-era levels and stay somewhere around there. this will come as heresy to some of those on the other side who not only wish to extend the current rate in the upcoming lame duck session but also about to cut rates even further in tax reform. these folks believe cutting the top rate as low as 25% is a necessary ingredient to spur an economic recovery. a congressional research service analysis released last month suggests otherwise.

they are impartial and in a survey, the last 65 years of fiscal policy in america, the report concluded that tax cuts "do not appear correlated with economic growth." recentxperience, of course, suggest we have nothing at all to fear from a return to clinton-era rates on the wealthiest americans. in 1983 in the balanced budget agreement which was signed by president clinton and set up a higher top rate, reduced to five years of gdp growth and the greatest peacetime expansion of our economy in the nation's history. by contrast, the decade checked by bush tax rates squandered our budget surpluses, produced net- jobs and culminated in the great recession. the lesson here is that the contrary -- is that contrary to supply-side economics, the level of the top rate does not by itself dictate what happens to gdp.

a balanced budget aided by increased revenues just might restore confidence to investors and jump-start our economy. for the third and final element of this tax reform model, we turn to investment income. it is time to reduce the sizable differential and the tax treatment of earned and unearned income. the reduction in the capital gains rate to 15% under president bush was a major contributor to the growth and wealth disparities we see today. the top 1% on average received 20% of incoming capital gains, 10 times as much as the rest of the country. capital gains makes up 60% of the income recorded by the forbes 400. the extremely low 50% rate in effect today is an allied air. it is the lowest rate on investment income since the great depression.

republicans have understood the need to raise it before. as part of the 1986 reform. allred and raised it to 28%. simpson-bowles doors raising it, too, all the way to the same level as ordinary encounter if you are returning the top income rate to clinton-year levels as i have proposed, i think it is too much to treat capital gains the same as ordinary income. we don't need a 39.6% rate on capital gains. without question, we need a narrower differential between earned and unearned income and we have today. that will bring more fairness to the code. and buffet will have a harder time paying a lower effective rate that his secretary and we will also deliver more revenue to reduce the deficit. these three principles -- curtailing tax expenditures, returning to a clinton-era to

operate, and reducing but not eliminating the tax preference for investment in come provide a foundation for a tax reform plan that would reduce the deficit without hurting the middle class. you may ask, what is in this for republicans? why would they come to the table around a proposal that does not cut rates? for one thing, they get serious reductions. which will matter to the true budget hawks in the republican party. that is no small achievement. it could be the most important achievement without their what else besides deficit reduction would republicans get out of tax reform steps in my opinion, that is the wrong way to think about it. the lure for republicans to come to the table around the grand bargain should be the potential for serious entitlement reform, not the promise of a lower tax rate in tax reform.

democrats will never sign onto a shredding of the safety net because it is necessary to change -- is not necessary to change the fundamental way medicare works. we can reduce medicare by hundreds of billions of dollars. that is tough medicin but still preserve the safety net. that is our grand bargain can be had. republicans get entitlement reform, democrats get revenue from the higher income people. one last note on the prospect for a deal of this kind -- republicans may not be as far as you think from accepting the need for revenues out of tax reform. are two reasons for optimism -- for one thing, the public is indicating it favors a our sides approach on taxes. a poll last week showed voters trust the president does handling of tax is more than mitt romney. another poll also give the

president the edge on that issue. this is the first time, the first time, that democrats have had the upper hand on taxes in 30 years. this represents a sea change. the six causing republicans to rethink their approach. look at governor run it -- in recent weeks, he has gone to great lengths to moderate his tax proposal to appear to a broader audience. he went so far as to promised in last week's debate that he would not reduce the net tax burden on the wealthy at all. the second reason for optimism about republicans coming to the table is very simple -- it may be as hard for republicans to compromise on taxes. they may find a result of not compromising to be worse. the scheduled expiration of all the tax breaks at year end gives republicans an incentive to act.

presidents obama has stated without equivocation that he will veto an extension of the tax cuts for the above must bracket. they may soon realize that it is far better to extend 98% of the tax cut than none at all. this story in today's "financial times" i brought it. it is right here. republicans just don't on taxing the rich. in -- shifti tone on taxing the rich. that would give a break through tax reform needs. democrats should seize on this. it is interesting -- for years, many of my colleagues have fought to end of the reduced rate on the wealthiest americans in the context of the bush tax cut debate per yet suddenly,

when the idea of cutting tax rates for the wealthy is peddled under the guise of tax reform, too many people forget their opposition to it. that makes no sense. the contradiction just goes to show how deep the nostalgia for the 1986 tax reform agreement is. and for the bipartisan cooperation that made it possible. in the face of today's yawning deficit, that framework is passed its prime. in an earlier era, the reagan approach was the gold standard of tax reform but it is long past time that we moved off the gold standard. thanks and i am ready for any questions. before >> go to questions, let's take care of a little housekeeping. we have a packed house. there are some people and all white and some space if you want

to come into the room. please do. in as many folks as we can. thanks. take those chairs. in another housekeeping item, we will take questions now for about half an hour. if you can identify yourself by name and your news organization and keep your question relatively short because we don't have a microphone in the room and it is hard for people listening to hear the questions there having said that, let's take some questions. yes, sir? >> christian science monitor, you talked about being wary of tax proposal that give a rate but don't say how they will get

there and you talk about entitlement reform but did not give specifics about how you like to get there. is there something possible for democrats? what is good on the reform scitex >> the purpose of this speech is not to lay out a space of a plan on either side. i am as letting out broad directions because i think if we don't change the direction of tax reform, we will never get a deal. make no mistake about it -- democrats are willing to do serious the entitlement reform providing we keep the safety net there is lots of ways to do it. during the negotiations between speaker john boehner and the president, mellon said that broke down on the basis of entitlent reform. i don't know single news report that said that. every time we have come to a deadlock and getting deficit reduction, it has been revenues that have been the sticking

point. i think i am certain that democrats are willing to step up to the plight of entitlement reform provided it does not change the safety net, cut the benefits, there are so many ways to save money. it is tough medicine but we are willing to swallow it. >> can you say what impact your position will have during a lame-duck session? do you believe a deal can be had before january 1. >> yes, i absolutely believe a deal can be done before january 1. i am not part of the negotiations but i have stayed in active touch with both sides of the aisle. i think there is a genuine agreement that people want to come to the deal. i have tried to think about what has prevented us. people have been trying for two years. i take off my hat to the group of six and a group of eight and i like them very much and talk to them all the time.

has stood in the wedtech -- what has stood in the way? that has been on revenues, not the entitlement sudbury why did it break down revenues? if you believe that grover norquist will be preeminent and not that any revenues, will not have any reform. every budget deal is balanced and i salute simpson-bowles for letting that part of the french work out. what has messed this up is the starting point of bringing the top rate down. as i outlined, you cannot get a deal that way. what i am trying to do is make some positive suggestions that lead to a path forward. i did it now rather than waiting until november 13 because it might be too late to them. -- then.

>> do you have the support of the majority leader, harry reid? >> this is my idea, it is my way forward, not theirs. having said that, i have had extensive conversations with the leader harry reid and talk to chairman baucus and a number of the group of six and members and the white house. i have talked to a whole bunch of people about this but i have not asked them for a green light to go forward or signed off. they will have to each judge the plan for what they think that they know about it. >> is there enough time in the lame-duck session to do a grand bargain? >> i hope there is and i think there is. i think it is a last resort to kicked the can down the road parapet i think that gives several special interest more time to 0 and the thing they don't like.

i think it is better to do it nampa pill. we can. -- i think it is better and to do it now. that is what i have given the speech, to try and create a path for that might work. >> how does the election act is more or less likely to happen? >> good question, i think it makes it more likely to happen for the reason that i mentioned. as long as i have been in the congress starting in 1980, republicans have had the upper hand on the tax issue. u.s. the public to the trust's current taxes and inevitably, it is the republicans. the couple of years ago on both sides of pennsylvania avenue, democrats made the first real concerted effort to say that there is a difference between tax increases on the middle class and tax increases on the wealthy.

to be honest with you, the fact that the pie is shrinking for the middle-class this decade and has another decades makes the middle class more receptive to .hat argument as well prepar i think people are reading the tea leaves. this article i thought was very interesting today. a senior republican aide in the house says we will not have that much leverage. he says we will succeed. this is the author of the article who is stephanie kirchgesser. if republicans back away from their hard-line on high and taxes, the outlook for avoiding the worst of the fiscal club as much rosier perhaps -- fiscal cliff is much rosier. mitt romney took a step back by

insisting that overall, net tax revenues from the highest income people would not decline. i had not heard him emphasize that until the debate. that shows you where the wind is blowing. i think the election, a combination of the election and, more importantly, the fiscal cliff where the rate goes up next is more possible than it would be a year ago. >> if republicans do well, doesn't make sense that sticking with their argument would work better for them? >> i don't think they will do that well. second, even if they should do well, the basic math will still be there. they will have to abandon one of three points of the stool. it is mathematically impossible. there will have to abandon keeping taxes -- preventing tax increases in the middle class. i don't think they want to do that or they will have to

abandon lowering the rates on the wealthy or deficit-reduction proposal i think if they are in charge, they will not want to have lack of deficit-reduction on their shoulders. >> you said 15% is too low for capital gains. you said 29% is too high. where would you put it? >> my purpose is not to put together the specific details of a plan. it is to lay out a pad. path. >> if the republicans don't agree to some sort of revenue increase in the lame duck or a framework that guarantees revenue increase next year, are you willing to let the fiscal cliff take place? >> drawing lines in the sand, taking things off the table is

not productive in terms of negotiation. i am hopeful that there will come to the table. i think we should make every effort to have them come to the table. the president has said, as you have seen, that he will veto anything that allows the bush tax cuts to continue for high income people. think we are all in this little narrow time horizon where we have to get something done. i am actually optimistic that we can and i see the biggest barrier in the way is this of view that has been accepted by republicans but also some democrats that tax reform is the place to start in terms of revenues, old-fashioned tax reform. i'm all for broadening the base and closing loopholes that are not vital to the middle-class, but, the rest we should look at and use that money but used it for revenues.

if u.s. the average economist, even the average senator looking at it that way, if you have revenues from reducing loopholes, should we use it for deficit reduction or to reduce the rate of the top income people? most people would say a deficit reduction. my guess is many republicans would say that but somehow, by magic, you call the tax reform and they said -- and they said let's go for lower rates. >> a few weeks ago, democrats passed legislation in the senate to allow the top bush tax rates to expire. you seem to be talking about more revenue than that. was that a mistake in hindsight? >> i want to come to an agreement. i think you need more than the

$800 billion on that and the estate tax. you have to find other places and that's why i have outlined some of them in this speech. >> take what you offer them and say no more? >> may billy -- maybe you'll go for a slimmed down deal but i hope we won't. $4 trillion is the amount we need to turn the slope around. if you're going to go for $4 troyer, i find it hard to see how you will do with only $800 billion in revenues. >> he talked about curtailing taxes. you talked about how for the tax breaks are for the middle class. >> you would have to look at all the tax breaks, all the tax expenditures, and see which are useful and which are not, which

are vital to middle-class growth -- the two most important issues before us as a country on the economic side are the deficit and getting the middle- class growing again. you look at them and ask of this really helps the middle class. i think things like mortgage and charitable fall into that category. >> [inaudible] >> i would like to get this done and the lame duck a possible the more seeded to post- january 1, the harder it is to get done. chairman baucus has spent almost two years having hearings on tax reform. he has looked a lot of these very carefully and he will be a wealth of help and tried to get these done.

>> i was wondering where you stood on the employment- sponsored tax benefits. >> i will not go into specifics but they are important. for middle-class people. what i take anything off the table, no, but they are important for middle-class people. >> earlier in the year, you were hoping to define the wealthiest people making $1 million per year or more and now it is $250,000 or more are you still talk talk about the same number? >> i have always preferred the million dollar line parole the reasons i have stated. to me, it is for more important that the high and people -- high-end people contribute to rabin is that it is where

exactly draw the line. the president felt very strongly about it and i will not create a fight which will disrupt the larger goal. >> , to the $4 trillion would you like to come from revenue? >> i would not pick this is a that number but a good place to start, a place that seems to be an arid area, is the president's $1.50 trillion. that is about the ratio. if you had $800 billion in revenues, you don't get to the simpson-bowles. you don't get to that two-one which seems to be accepted by most. >> you have had predictions

about how many seats you will control of the senate and how does that change the debate? >> i think we are doing well. you can look at it state-by- state and we're doing much better than we ever thought a couple of years ago. in january of 2011 -- and i think continues. i'm not seen any change and that since the debate. i thought the 538 guy - ." columnlvers had a good today about where things are headed. he seemed to indicate that you use history as an indication that there is a rhythm to these things. he did not back of his predictions that the president had a decent chance of winning by a decent number of electoral votes. >> is the tax rate staying the

same or less for people making 200 to the thousand dollars a line in the sand? >> there is not a line sent but i feel strongly about this. it would be hard to envision something that goes higher. i would say we will not go higher and raise tickets -- raise taxes on people below 200,000 -- to enter the 2000. but left >> the gang of eight is supposedly meeting this week. are they relevant? >> i think there are very constructive. they have made real progress and are starting to look at things. i talked to people on both sides of the group in much more detail than they ever did before i think they can be a very constructive force. but i am encouraging them. >> i have always been confused

as to why we make source of income at different tax rates. why should the person who makes $50,000 in wages or capital gains pay what ever and somebody can make $20 million whether it be which is our capital gains and pay their rate? >> that is an argument that i am not taking sides on. the counter argument is that you want to encourage capital into job creation, job formation, growth, and that is why there is a differential at all. some say it does not matter. the jury is out on that one. if you want to encourage it, it does not marry -- matter where the money comes from. it is still $1 that will go to create jobs. >> you are familiar with the

economic research showing the uncertainty over the debt ceiling and the cliff has cost jobs and economic growth. does that mean that the post- election cycle will have to settle what happens on january 1? will they have the leadership and candidates? >> the danger of not solving this is very real. that is why i am reluctant to kick the can down the road in any real way i think there is a real imperative that we have to do it and it goes to the economy but also goes to the fact that people worry about the country and can we actually govern? this is what i tell my colleagues -- as a country, we are a blindfolded man walking toward say clgff, and if we keep walking in the same direction, it is inevitable we will fall

off and kill ourselves. are we 500 feet from the clip or 5,000 yards from the cliff. i don't think you need to debate that we should not keep going in the same direction. it would be preferable to settle it. i want to try to break the deadlock and gridlock in a way that can be constructed. i have spent a lot of time thinking about doing this, since july. it is important and i think it is possible for the reasons i stated, the changes that have occurred in the campaigns and the january 1 deadline. >> if the house remains republican, how will the democrats maintain high income taxes. >> speaker john boehner, i think, would like to come to a deal. i have said this before.

i think that if the embrace of the tea party end of this is seen as not productive politically for other republicans, it will strengthen the mainstream conservatives who want to come to a deal. the tea party ties to our guest a deal is not relevant. >> why is it a good idea to open the door to serious title -- and saddam and reform? -- entitlement reform. ? >> we believe you cannot enter the program as is. that is why we think that that's have to be maintained and that is why we think there has to be a safety net. i don't think i have said anything new. it seems anomalous for those on

the other side to say we what entitlement reform and we want revenues the way we want it. you can save hundreds of billions of dollars and still keep the benefit structure. it is tough medicine and many people will like it but you can do that. >> production tax credits for the wind and energy business are expected to expire. will those get renewed? >> hope so about the bomb -- i hope so. a small number of people using the several said they would block it allows the got their way you would have to talk to german bloch's and senator hatch and senator -- chairman baucus

and senator hatch. >> do you want to change the tax interest for carried interest? >> i have always believed that carried interest should go opera but i also believe you should not just single out financial-services bedewed for everybody. that is where the president's position is for oil and gas and real estate and other kinds of partnerships. that has been my position and continues to be. >> tomorrow, our luncheon speaker will be general martin tent dems they prepare listed above more questions. >> mentioned that you talk to the white house.

they say this president has not been engaged. spearhead members of your on board is a different light. i believe the white house will be fully engaged in the dead as a reduction effort. both inside and outside working with members and outside going around the country from the day after the election. i believe they will be actively engaged in this issue. as far as i'm concerned, the president is very accessible. >> you said you think this speech will help matters also admitted that there is bipartisan groups like the gang of eight and the bulls-simpson

commission had begun coalescing around the red reform model. how does this help? >> that is a good example why they have not been able to get anywhere in two years. that's why they have not come to a solution in two years. it is a suggestion that i hope will help break the deadlock. i hope it will help the gang of six and a gang of eight to move forward. i talked to a bunch of them about this ahead of time. i have talked about this for months and months but also let them know that i am giving this little chat. yes, they have coalesced around the broad concept but no one has ever talked about what loopholes to close to make up the difference. that is because when you do it and look at the math, you're not just dealing with the easy

things like sending jobs overseas. you have to get the revenue and cut into middle-class loopholes closings. i think we have to break through that. >> what happens if governor romney is elected and this is a referendum on taxes than i don't the will happen but does governor romney want to reduce the deficit? if i was president, no matter what party, and i have four years ahead of may at one of the economy to recover, i would sure want to get a deficit reduction done. when he looks of the math, is the three choices. if what i have granted is

respected value and only have two of those, that is one that he might go for. i'm not saying he will say that tomorrow but i don't he will be the president's zero would not matter. >> does this put pressure on your colleagues? >> there's the pressure i can put on them. i can propose an idea and see people grasp it. if it helps move things forward, that is my intention and i hope that's what happens. >> in terms of major internal reform, one of the big things is to raise the age. are you taking them off the table? >> i am not taking anything off the table. i have been personally against raising the age. i continue to be. i have never on any of these issues say i will not support this bill.

i don't think raising the age will happen. at there is opposition to it. -- i think there is opposition to it. >> you mentions deficit- reduction. is the consensus that that is the best way to improve the economy? >> there are two challenges and they're hard to manage. the idea that middle-class incomes are declining of which jobs and health and education and even immigration are subcategories is delays at important a good deal has to have all that. that aren't -- those are not issues i chose to address. porteous do with infrastructure and scientific research and education? my position on those are pretty clear. >> how do you address the 47%

issue, the folks that don't pay income taxes now? >> i think people below $250,000 to not get any tax >> thank you very much. >> thank you everybody. ." >> thank you everybody. [no audio] [no audio] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> senator chuck schumer in his comments, talking about taxes. there are reports today that the

so-called gang of six, now, 8, is meeting in mount vernon, washington, to deal with the fiscal cliff, the impending tax increases, and the sequestration tax cuts. the u.s. house will double in for what we expect as a pro forma session. no legislative business, but we expect possible comments from democrats try to bring the house back into legislative session. that will be coming up momentarily. also live today, president obama in ohio, speaking at ohio state university in columbus this afternoon. we have live coverage of that at 5:00 p.m. eastern. mr. romney is in iowa today and there is a campaign rally later tonight in ohio.

so, u.s. house coverage coming up momentarily. our road to the white house coverage later today at 5:00 p.m. eastern. later this week, the vice presidential debates. we will have that live for you thursday night with coverage beginning at 7:00 eastern. let's take a now to the house f. the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's room, washington, d.c., october 9,

twelve. i hereby appoint the honorable andy harris to act as speaker pro tempore on this day. signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: the prayer will be offered by the guest chaplain, reverend steven of annapolis, maryland. the chaplain: let us pray. almighty god, to whom all hearts are open and all desires known, we humbly ask that we may always prove ourselves a nation mindful and deserving of your favor. bless our land with honorable industry, sound learning and civil conversation. save us from violence, discord and confusion, from pride and arrogance, and from every evil way. defend our liberties and make into one united people the many. endow with wisdom those to whom you have entrusted the

authority of government, that we may prosper at home and that we, through obedience to you, may be a blessing to all the earth. fill our hearts with gratitude when we are flourishing and let us not lose our confidence in you when we are not. accept and fulfill our petitions we pray not as we ask in our ignorance nor as we deserve but in your kindness and grace. amen. the speaker pro tempore: pursuant to section 3-a of house resolution 788, the journal of the last day's proceedings is approved. the pledge will be led by the gentleman from california. >> i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all.

the speaker pro tempore: pursuant to section 3-b of house resolution 788, the house stands adjourned until 10:00 a.m. on friday, october 12, twelve. -- 2012. there. unfortunately, c-span does not control the cameras instead of the house. we are not able to show you the continuation. there are a number of democratic members and their aides on the house floor. over the past several weeks, democratic members have come to the floor to call on republican

leadership to bring congress back to work. the next legislative session will be november 13. meanwhile, in washington, a group of senators, formally known as the gang of six, now 8, a meeting in mount vernon to talk about the so-called fiscal cliff, the aspiring tax cuts, the sequestered budget cuts, including senator chambliss. talking about the pending january 1 deadline. any news, we will bring to you. 15 years ago today, c-span radio was launched by the television

cable industry. you can listen to c-span radio in the washington/baltimore area on 90.1 fm, or online at c-span radio.org and now you can listen and your smartphone with a free c-span radio app your iphone, blackberry or android device. >> look at what president obama did on the budget. nothing, except borrow and spend. as a result of seeing the most predictable economic crisis in our country's history and not fixing it, our credit rating was downgraded for the first time in our history. >> we laid out a $4 trillion deficit reduction program. we already passed $1 trillion. ladies and gentlemen, they will

vote against anything. they do not like our plan toyota ok. what is your plan? >> thursday, vice president joe biden and a vice presidential candidate paul ryan will face off in their first and only debate. coverage begins a 7:00 p.m., followed by the debate at 9:00 p.m., and your calls and tweets afterwards. both the presidential candidates are campaigning in key swing states today. mitt romney in iowa. later, he will head to ohio. president obama is in the buckeye state later today, speaking at ohio state university in columbus, and here on c-span you can watch live coverage of his remarks as they begin at 5:00 p.m. eastern.

in prime time we continue live coverage with a west virginia governor's debate. the governor won a special election against bill maloney in 2010. we will have live coverage tonight from charleston at 7:00 p.m. eastern. last night, in virginia, tim kaine and george allen squared off in a debate to fill the senate seat left by the retirement of jim webb. this is the second of three televised debates. this one-hour debate courtesy of w c r-tv in richmond. >> tonight, the candidates will answer questions about the issue they will face.

the moderator tonight, the political analyst and moderator of many debates in central virginia. >> thank you. let's introduce the candidates trying to beat the next u.s. senator. tunis tonight are two former governors of the commonwealth. republican george allen and democrat tim kaine. both know the stakes are high. tonight's debate is being broadcast on television stations throughout virginia. you can join live conversation about the debate on twitter #peoplesdebate. here is a look of the guideline for the debate. and it's will answer questions for me and our panel. for each question, the cat is for whom it is directed will have 90 seconds to respond and the other will have 60 seconds for a rebuttal. there also may be a follow-up question. at the conclusion of tonight's

debate, the candidates will have two minutes each to sum up their thoughts. from the league of women voters of virginia, president lynn gordon. anchor stephanie. also joining us, the state director of aarp virginia. and from wcve fm, the vice president. thank you for being with us this evening. we have determined by a coin flip that tim kaine will be the first to deliver his opening statement. the floor is yours. >> thank you. and good evening to all. it is great to be here with the league of women voters, those in the studio, and especially those at home. i am proud to be in my home town public television station. i am a huge public broadcasting fan. i pledge tonight not to fire big bird, not to defund the big bird.

lessons that i learned as mayor of this city. if we invest in the talent, if we invest in infrastructure, if we level the playing field, we will grow the economy. frankly, we have a ball and chain. it is congress. congress is holding us back. we need to change congress in two ways. we people who are more fiscally responsible. when the people who know the basics of how to work together. you will hear these things a lot tonight in my comments. i was the governor who drew top tax fraud. i had to cut $5 billion from the state budget, including my own salary. i'm the only governor in modern times who left the office with a smaller general fund budget and when i started. i know how to be fiscally responsible. my opponent when into the united states senate in 2001 with the biggest surplus in the

united states and six years later left with massive deficits. during his time in the senate, the national debt went up by $16,000. he conceded that spending was a problem in the senate. we also have people who need to know how to work together. i learned to cut crime bills and the economy. my opponent said his job was to not democrats softly. he took this similar position in the senate, fighting efforts led by the then-senior virginia senator. when someone who will fight and that is what i will do is your next to none state senator. >> if mr. allen, your opening statement. >> thank you. it's much better future than what we are having to endure these days. that is why i put forward a detailed plan.

my blueprint for america to get an economy and stronger jobs. the question is which one of us can be accounted upon. you may have read an article that was comparing our two governorships. the call me when the most accomplished modern governors with major improvements in public education, safety, welfare reform, and i described how worked with leaders in the other party to get results for the people. the bad economy, his decision, his choice serving as national party chairman rather than focusing on the economic crisis in virginia. it is the great, and answer a question in this campaign. how does a governor decide to take on a second job, giving partisan speeches, well over 100,000 jobs are lost here in virginia. if he had given his governorship the full attention,

he might have avoided some mistakes like increase in college tuition by over 40%. if he had been listening to the people of virginia who are really facing tough times, he might not have proposed raising taxes on working people, working women, seniors, small business owners, and people earning $17,000. he might tip been against the sequestration deal threatening jobs in virginia right now. but he made different choices. soon, you'll get to choose. if i have the honor of being your senator, i will give all my energy to working with both parties and getting america us sending once again. >> let's follow immediately on these opening statements here. your campaign has basically said that you will go to washington, work across party lines, and fix that toxic political environment.

but at the same time, you spent years as the democratic party chair, in some ways, being the partisan chief of the party. what would you say to virginians that would convince them that when you go to washington, you'd be not partisan and not simply a loyal lieutenant in harry reid's army. >> i will tell you two things. i served with two presidents. i serve with president bush and president obama. we did not agree on everything. i worked closely on the bush administration on a number of issues that put virginia first. railroads are being built right now largely because of president bush and his secretary of transportation and our ability to work together. we worked with the bush administration in the aftermath of the shootings at virginia tech. i will always be a partner of the nine states, whoever the president is. i also have a track record of working across lines.

first, here in richmond. second, as a republican -- as a governor with republican houses. we were the best-managed state in virginia. revested for business all years i was governor, forbes magazine. those were not tim kaine accolades. those are things we did working together. when the president ask that i serve as the and seek share, i think i had my best year. we got smoking banned. all three publication ranked virginia the best place in the united states. we saw a huge improvements in infant mortality. we recruited numerous businesses in the heart of the recession to come to a virginia. rolls-royce opened a manufacturing facility. virginians care about results. we got results by working together.

>> well, kim, there is a big difference between being the chairman of the entire democratic party committee and other political jobs. you have said how difficult the economy was in virginia, and yet when president obama asked to take on this job, you could asset to the president, i appreciate the offer, -- you could have said to the president, i appreciate the offer, but i have a job. he could said, as governor, you only have four years to of a positive impact on people's lives. you were shutting down rest areas that last year. over 100,000 jobs were lost in virginia. you could've told the president that people are hurting in virginia and you needed to give all of your attention to the people of a virginia. now, you're asking for another job when another job if you have for the people of virginia, you did not give them 100%. >> george, i'd give them 100%.

>> we're going to go to our next question. >> not to rebuttal? >> not now read our next question goes to lynn gordon. >> thank you. mr. allen, today women aren't 77 cents to every dollar earned by men. -- women earn $0.77 to every dollar earned by men. what will you do to address this pay gap? >> no one worked harder than women. i could never do what she does. notches in the campaign, running our household. i think that is the case with women that we know throughout virginia and across america. all of the issues we are talking about, pay gaps, that is something i care about. i have a daughter who is just entered the field of work and a doctor who is a freshman in high school.

i want to make sure of my daughters did the same pay for the same kind of work. the main thing we need to do is get this economy working in the right direction. in president obama's economy, they have been disproportionately feeling the brunt of this economy. there is 5.5 million women who would like a job but are unemployed. there are many others who are underemployed. the poverty rate amongst women is the worst has been in 17 years. the extreme poverty rate is the worst it has ever been. what we need to do is make sure we're doing the right things to get this economy moving. i remember talking to a mother at a gas station who only could afford $20 of gasoline. i said if you could afford a fellow, it would cost to $37 more than it was four years ago. what would you do with that extra $37? she looked at her two children and said, well, it could pay for

dinner for my children. that is the reality on why we need to have a policy in this country with more affordable energy and get our country moving in the right direction so that women do have the opportunity to lead the strong, independent lives that they deserve. >> mr. kaine. >> i think the issues are very important, especially in 2012. we've seen a whole lot of efforts to block women's progress, efforts i stand against. we have significant differences. i am proud of the fact that when i was governor at a challenging time, we did a lot to bring new businesses to virginia and to have a profile that was significantly greater than other states. if you rank states in the unemployment rates from top to bottom, we were better off in the kaine administration than me allen administration. i support the act, george allen has refused. george allen repeatedly voted against it. i stand against efforts to take

away women's rights to receive contraception at their workplace. george allen and i are in very different places on this. these issues are about women's empowerment. you cannot have a strong economy for women if you take their choices away. >> thank you. intelligence suggests that the attack on the u.s. consulate in libya that killed a u.s. ambassador and three others was a pre-planned attack carried out by outside a. in light of this revelation, would you support retaliation on libyan soil? >> i do support military action against outside a. i think that for a long time the thought about the role in afghanistan -- we went into a afghanistan to get out at a. i'm glad we focused on it and

this administration has wiped out a lot of the top leadership about kai, including getting and killing osama bin lawton. al qaeda is active elsewhere. i think the activity in africa -- in africa suggest that we need to take the battle to there. the question of when you undertake action is always a delicate one. it is important for the president and congress to be in dialogue to make sure they are doing the right thing. al qaeda terrorist declared war on the united states. wherever they're acting, if they are perpetrating crimes, we need to go get them. yes, if there was a solid, credible intelligence associating the attacks in libya from outside were there, and we had the opportunity to get them, -- they have committed an act of war against this country. we pursue them just like this

president pursued osama bin laden. >> we ought to go after the terrorists who killed our ambassador, wherever they may be. this is a reminder to all of us of how wrong and dangerous it is to be having these dangerous cuts to our military preparedness. our country is being attacked around the world. it is not a time to receive or ruin the modernization of our forces with these disproportionate cuts that are coming to our national defense. tim and his allies up in washington are saying we do not want these cuts from defense as the house did or did something similar to that. what they want to do is raise taxes. it will not create any jobs. we in virginia have over 200,000 defense and technology jobs. rather than cutting back, we need to make sure we have a strong economy, a strong military.

as far as our spending, i disagree with the president giving money -- if they cannot protect our embassies, they should not be getting our money. do not buy a friends. second't there is 60- rebuttal? >> no, there is not. >> island that on the first one. >> i thought i did, too. >> if we were both under the impression. >> virginia seniors who rely on social security benefits are in for a lifetime of work. almost 1 million virginians receiving social security check every month. they are very polite, receiving on average about 77% of their total monthly income from this

alone. an aging society will put strain on the program into the future. how would you protect social security for today's seniors and a strengthened it for future generations. >> thank you. i think we need to preserve social security for current beneficiaries as well as in the future. social security beneficiaries have for their entire lives and paid into it. they ought to get the benefits that were promised to them. that is one of the reasons why, as governor, we took off the unfair tax and social security. we also did away with the discriminatory tax against federal retirees. one of the things that will help social security is a jobs. the reason is is three years

earlier is because there are still people working. one of the reasons is a vibrant economy with people working. there are some changes we should put on the table and i think there are reasonable ideas for protecting the solvency of social security. that is, for example, for those who are under 50, it would not affect anybody age 50 right now or older. have a gradual increase in the age. another is an increase in the age of eligibility. have some income adjustments. for those who are millionaires, they do not need to have all those same benefits as those of lower income. that would be a way of doing it as well. one thing we should not be doing is what tim kaine try to do as governor -- raise taxes on seniors and working women. those of the folks you are talking about. the last thing they need is more taxes imposed on them by the government. >> he estimates the fact that as governor in eliminated the

estate tax and took more than 100,000 low income virginians of the income tax rolls. i just thought i would correct him there. george and i have very different strategies. this is one of the most important programs that has ever been done by the government. more than 50% of american seniors have retired into poverty before it was passed. thank you we have -- thank god we have those days behind us. that would've been a huge catastrophe prior to the collapse in washington. what i would do is allow the payroll tax of words as a way of protecting the solvency of the program. on medicare, george allen supports the ryan budget that would turn medicare into a voucher program and push costs onto the seniors. i propose a senior savings costs, for example ending the

prescription -- that we get. that would save us without jeopardize in the benefit of all. >> mr. allen, to ask both of you to take one minute to respond to tim kaine's assocation about medicare and to support the ryan budget? >> what i support is preserving medicare. both are programs that people have worked through for their lives. some of the things that can be done in social security also have to be done in my view. that is a gradual increase in the retirement age and eligibility. not for those were 50 and older, but those were under 50. there is also over $50 billion of fraudulent payments. that ought to go to medicare. the one thing that should not be done is what tim kaine supports. what he said previously is that obamacare would be great for

democrats. the seniors that i have heard from to not think it is at all grade that over $700 million is being taken out of medicare to pay for other programs. i have heard from so many folks -- doctors, cardiologists. there will be a researcher, rather than a physician providing those services. they will have difficulty getting access to those because of obamacare taking some much money out of medicare. my general view is that health care decisions ought to be made by doctors and patients -- not government panels up in washington. >> /security and medicare, again, george as a center voted for a risky privatization. i can tell you that i'm in the u.s. senate, i will fight efforts to privatize social security and to my last breath. if it would have been a disaster that had happened.

let's talk about medicare. if georgia suggest that i want to take money out of the medicare program. the $700 billion your first to is ending payments to insurance companies so we can extend benefits for seniors. a prescription drug benefit pre-preventive care. george's plan, repealing the affordable care act would take the benefits back from seniors and give them back to insurance companies. he would give them the right to turn people down for the pre- existing conditions. he would give them the right to charge women differential premiums than men. we will not solve our health care problems by putting insurance companies back in control. let's end the sweetheart deal that was negotiate with pharmaceutical companies and negotiated. we will save $250 billion over 10 years in medicare. >> as a to a question by bill kallio for mr. cain.

>> what could congress have done differently that could have led to greater or faster improvements? >> bill, i really believe what i said in my opening that>> bili said in my opening that there are some signs that the economy is starting to move forward. last friday, on the same day, we had the highest down number in five years. the lowest unemployment rate in four years. i think congress is the anchor wait. just look at recent history. there is a veterans a jobs bill that was pending before congress within the last few months. a decision was made by the senate minority to filibuster the bill rather than pass it. that is devastating to veterans. all the reporting suggested they did it because they want to wait past the election day to do something positive. over the summer, republicans in the senate and democrats

together pass a farm bill relief. flood insurance. school lunch programs, good for kids and grown-ups. when the bill passed, it went over to the house and the house decided to bottle up until after election day. we have a congress that is so dysfunctional that people will not work together. we see that again and again. if our ideas are perfect and do not work together, who cares? that is why we cannot afford to go back to a day where we add to the partisan record. we have to have these builders. when he was in the senate, he ridiculed john warner's efforts to find compromise, saying that we do not need to find compromise. i think we need people who know how to compromise in that one of our economy forward. >> i want to get a few things straight here and in answer to your question. first of all, what we need to do is repeal and replace obamacare. i've talked to people but everything from internet access

to screening newborn babies. the same as governor in over 300,000 net new jobs to be created and during my four years as governor as opposed to 100,000 jobs being lost. my view on what we ought to do on health care reform is not take a lead the decisions from doctors and patients. we ought to be in power and individuals. we ought to and will address pre-existing conditions. i do think children ought to be a totay on their parents' policy until age 26. the other thing, for jobs in the economy, this is a real impediment for small businesses. i think small businesses ought to be a will to band together across state lines and have more competition, more choice, and more affordable health insurance.

we ought to have help savings accounts be made more prominent. their personal, portable, and you can take them from job to job and not have to worry about a pre-existing condition when you have a new job. there are a lot of things that can be done. what we do not need is higher taxes, more regulations. we need to unleash our american energy resources. have a tax for that is more simple, competitive, and fair. if you look at my blueprint for america's comeback, that is the way of getting jobs in america. sending the message that america is open for business again. >> i would like to give each of you a minute and a half now related to the follow we just had. mr. kaine can you address that we do not need tax relief and the obamacare should be repealed? >> let me dive right in on taxes. we have a balance sheet that is broken. when george allen went to the senate, it was the spirit we had a surplus. but he broke both sides of the balance sheet. he dramatically slashed taxes

and jacked up spending $16,000 of debt every second that he served for six years. the balance sheet was completely out of whack and it is there today. i really believe that to fix it you have to fix and both sides of the balance sheet. you have to make cuts. i believe that we should be looking to make cuts in the federal budget of about $2 or $3 for every dollar of revenue. i know how to make cuts. i'm the only governor in modern times who left office with a smaller general fund budget and when he started. george has never shown the ability to make any kind of cuts. it with a 45% when he was governor. -- it went up 45% when he was governor. on the other side of the balance sheet, the tax side, i do believe we should let the bush tax cuts expire, as planned. there were temporary, for this to make more than $500,000 a year. that is a compromise between a democratic position of $250,000

and republican position of making all of the tax cuts permanent. if we do that, we raise $500 billion of the next 10 years and that is how we can avoid these catastrophic sequestration cuts. george has pledged never to raise any tax revenue. he will not fix either side of the balance sheet that needs to be fixed. i record of fixing both sides of the balance sheet. >> you do need a balance. the knees to the cuts made in federal spending and you also need to grow the economy. what we need to repeal and replaces obamacharacter that will save over $1 trillion and be beneficial for small businesses. you can also look at the government where there is efficiencies in overlap. we also need comprehensive tax reform. i think we ought to have a tax code that is more simple, more fair, and more competitive. what i have been advocating is to produce the jobs -- to reduce the jobs to 20%.

imposing the worst in the world taxes. if we reduce it to 20%, over 500,000 jobs could be created and $23 billion of new revenue. that will send a message that america is open for business again. we are in america with the most of energy resources in the world. we are ready, willing, and able to provide america with the power to -- with the power to our of economy. on day one, after being sworn in as your senator, i would introduce a bill to allow us in virginia to produce oil and natural gas off of our coast. that will lead to royalties. if we did this nationwide, there would be hundreds of thousands of jobs created and

the federal government would be able to get over $1 trillion of revenue without raising taxes. best of all, we would be keeping our money here in united states of america. that is the way to getting our economy growing and improving the quality of life. >> i would like to change the topic again and moved to the question, last spring in virginia the general assembly had legislation proposed that would require women obtaining abortions to have ultrasounds and affectively impose a person could amendment where the government would define where life has begun. do you think that your party has gone too far on these issues so much so that it invades the legitimate privacy of women? >> one of the consent issues that was brought up earlier, i would never take away contraceptives. i think that women should be able to have access to

contraceptives. some will say that you cannot have access to contraceptives and religious freedoms. anyone who says something like that is just playing politics. we can have religious liberty with women having access to contraceptives. those are the issues we are talking about in the general assembly. the one issue that has to do with accountability, as far as i am concerned is the criminal attacks on women who are pregnant. i think of that person injures the woman and the unborn child, i take that measure on personhood, effectively allowing for accountability for that attack. let me add one other thing that can was talking about from one of was in the senate. when i was in the senate unemployment was only 4.4% and the annual budget deficit was $160 billion and on a trajectory

to being balanced. now it is seven times higher. you mentioned spending at $16,000 per second. do you know what it is now? $47,000 for second. it is much worse. the other thing is our credit rating, down graded for the first time ever in history. when i left the senate, the government was borrowing 6 cents of every dollar. now is 31 cents of every dollar. that is why we need to get fiscal discipline in washington. >> mr. cane? >> i have never heard someone increasing the debt as a good thing by $16,000. the other thing that is mystifying about it is that as he did that he was repeating -- repeatedly raising his own pay. there was a vivid and horrifying spectacle last year in the general assembly, as far as

women's health, where the legislature tried to force women to have an invasive, medically unnecessary procedure against their will, at their own cost. i spoke out against it strongly, george allen took no condition on it. on his website he said he should -- we should pass personhood legislation federally. he supports the overturning of roe v wade, which i think would be a bad idea. finally, george supported the one amendment that would be voted upon by the senate that would deny women contraceptive coverage at their places of employment. i am against that. i will protect women's rights and their health care decisions. you cannot propel them through the economy if you take away their decisions. >> mr. kane, in order to retain our american democracy, it is important for there to be full disclosure, for there to be full

disclosure of all contributions. not just individual, but also those made by third parties. the bill that is currently in congress is to disclose after 2012. will you support this bill? >> i will. the current way of funding campaigns that allows secret third party organizations to run advertisements without disclosing donors, as there is no shame in being associated with a lie if you cannot be associated with a lie. sign-on day 12 a no principle of secret money. at the beginning of this campaign in december we debated and we asked third parties to stay out. we each were to lay out our visions before the virginia public. george turned that down, turned

down that offer. it is working in massachusetts, but he rejected it. i said -- how about this? if the superpac is going to be involved, how about a rule that a have to disclose their donors. george had often praised full disclosure of campaign contributions. i thought that he would bite on this and we could have a transparent campaign. once again he turned us down. if you turn on the tv now you are seeing huge numbers of advertisements run by third- party organizations often labeled fraud. i will try to defend the status quo, but i will also try to maintain no secret money in politics. voters have the right to know who is funding campaigns. >> i am strongly in favor of freedom. the supreme court has ruled on these matters. i like the disclosure laws in

virginia. if there was more disclosure, there would be more contributions in the campaigns. including the ones that were run by negative ads about me, the attempt has brought up this issue of pay. in these advertisements he has said he has set a positive example by cutting the pay of governor. let me put to you the truth full facts and let you be the judge. on day #1 i returned 10% of my salary. mark warner followed up and cut his by 20%. kim did not cut his at all. he could have followed mark warner by example, but he did not cut his own until his second year as governor to cut it by 5%. i was the one who set a positive example that you followed, but

halfheartedly and late. as far as in the senate, in the senate i returned over six years -- i overturned six years from our office accounts. i do not think there should be any pay increase for congress and they should uphold -- they should withhold the pay of congress because they have not gotten the budget bills done on time. >> did he go over time? >> not yet. you have gone over. >> mr. allen, president obama decided not to enforce deportation for children of immigrants that came here illegally. do you agree with the decision to allow children of the legal immigrants to stay in this country -- of illegal immigrants to stay in this country? >> i think that they can contribute a great deal to our country. immigration law should be based

on the best interests of the country. i think that what the president did was a -- ignore the law rather than taking these cases on an individual basis. he set aside a whole class of people exempt from the law, which will make it more difficult to get real immigration reform. what i hear from the people in virginia is that they want their borders to be secure. i am for making sure that america is the world capital of innovation and one of the ways of doing that is making sure we're working with the best minds of the world. yesterday, someone with an engineering degree, jobs are needed, attach a green card to their diploma. i think that there are positive reforms that can be made. even for the temporary workers.

there ought to be a much better system so that those people can come in who are checked out and are here on a temporary basis to provide the good work needed here for american jobs. those are the sorts of reforms that we need and we all need to get together to get comprehensive reform done. the one thing that does not work in my experience is illegal behavior. >> about out of time. >> if you reward that behavior, you will get more of it. >> one thing that we agree on, this discussion on visa is a good thing that we need to do. we need reform of the visas. we want people to be able to stay. and we should make the process easier for tourists to come to the united states. if you live in brazil and want to go on vacation, it is a lot easier for you to go to europe. where we disagree, i do support

the act. youngsters that were brought here by their parents, we should help them be overachievers, not locked them into under achievement. there should be a significant financial penalty for those who are here unlawfully. we could use the money and they could get in line for a green card. the georgia record on congress has been to impose and propose to eliminate birthright citizenship, which has been part of american law since the aftermath of the civil war. >> mr. cane? >> i want to go back here, you have jumped the gun on me. medicare provides health coverage for people 65 and older. some disabled citizens call at peace of mind. >> why? >> peace of mind. but out of costs are higher --

out of pocket costs are higher for virginians, about 13% of their income goes to a premium, copayment, and deductibles. every day more and more are coming into the system. at the same time, we also know that the cost of health care continues to go up. put that all together, medicare needs to be reformed in terms of where we are going to get the financial footing for a. i would like to ask you specifically for one proposal that you would propose or approve that would cut medicare on a strong financial ground going into the future without tacking on undue financial burdens. >> medicare is hugely important, an important part of the safety net and a challenging problem. we are living longer, thank

goodness for that. we have to solve the problem, and we can. i like solutions in medicare that cut costs and save costs rather than shift the costs onto seniors shoulders. when medicare part b was expanded for the prescription drug benefit, voted on when george allen was in the u.s. senate, a good program to expand, but two mistakes were made. congress decided to put it on a credit card. second, a provision was inserted that made it unlawful for the negotiation between companies for prescription drugs, even though we do negotiate with the companies for the va system. if we make that one change, that will save up to $24 billion every year, $240 billion over the next 10 years. it is good for the deficit and the solvency of medicare.

the second thing i would do, and some work on this is being done in medicare and in the private insurance area, an important reform is as a nation, we should be paying for health, the procedures. we pay for procedures and we get some of the most in the world, but if we pay for health the outcomes, we could save money and have healthier citizens who are happier and more productive. >> mr. allen? >> tim criticizes me for supporting medicare part b. i think it has been very beneficial to a lot of seniors who now do not have to choose between heat, food, and prescription drugs. coming under budget because of competition and choice, there are also aspects of health savings accounts that are beneficial as well.

taking $700 billion out of medicare to pay for these programs, tim may call it another program in a different light, but that will hardly make sure that it is solvent in the future. it makes sense in the eligibility age for those who are under age 50. i think that in, adjustments can be made. people who do not want medicare who have over $1 million in income per year. there are ways of addressing it. also, the $50 billion per year that has been appropriated should go back into medicare. the other thing that should be done, allow people to voluntarily use 401 k and ira, if they want to use long-term care insurance so that they do not spend all their assets if they need assisted living later in life. >> mr. allen, both you and mr.

kaine are on record as wanting to avoid the spending cuts that could be caused by sequestration by the end of the year. has there been any change between now and then? -- assuming there is no change between now and then, what should congress do next year? >> i am up on this first, right? well, it was a decision i was never in favor of. i thought that it put off our responsibilities to another commission. tim supported it in a recent debate. it is not the right thing to do, it jeopardized over 200,000 jobs here in virginia. leadership is not setting priorities. there are responsibilities for state government, education, and law enforcement. you pay for it with a vibrant economy, not with higher taxes. of what needs to be done at the

federal level is priority. clearly, national defence is the responsibility of the federal government as enumerated in the constitution. what needs to be done is making cuts elsewhere, but the other aspect is growing the economy. repealing and replacing obama care will save $1 trillion. there are at redundancies in government that can save tens of billions of dollars. i had to get rushed through it, energy, and how energy resources in our country can allow us to have a more secure country that is less vulnerable to outside forces. if we route -- release the resources to the north slope of alaska, there would be literally hundreds of thousands of jobs created and over $1 trillion in revenue coming from the government without raising taxes. the only thing that is missing

is the political will to release those resources. >> the question was about sequester and i did not hear any specifics from george on how to deal with it other than repealing the affordable care act, which the cbo says will increase the deficit, not reduce it, putting us right back into the mix of a partisan battle. we have got to do the fiscally responsible thing and find a compromise. here is a compromise. instead of cutting $1 billion from defense, let's let the bush tax cuts expire for the first dollar of income over $500,000, take away the tax subsidies we get from the big five oil companies, and let's fix that piece of medicare that i talked about earlier. if we do those three things, and they are all compromises, we do not have $1 trillion over 10 years, we have $225 billion

spread across government. secretary panetta says that we can find things, just to not give us a number that is too big. there are specifics that we can do this year to avoid sequestration effects. >> this week the supreme court is going to tackle affirmative action. should race be a factor as to whether or not they are admitted to a virginia college? >> the supreme court is going to tackle this case, which they last dealt with in the university of michigan case in the early 2000's. the issue there is to our public colleges except students and a student body that look like the population is served. my kids have gone to public schools and they have come up in classrooms that are extremely diverse. they have got a great academic education and a spectacular

education that comes from the folks living in the real virginia today. i would hope that what the supreme court would do in this case, and they would affirm that it is ok for a public institution, whether it is a government handing out contracts were college admitting students, that it is ok for them to try to make sure that their student body looks like the state. if at all possible, they should use factors other than race. economic disadvantage, are you the first time in your family? if you see public institutions where the birds the students look dramatically different from the state's population, it is an indication of challenge and a problem that we have to try to solve. i strongly believe in the diversity of our commonwealth as being a strength and we should see diversity in our public institutions. >> i am in some agreement with

what jim said. i am in favor of affirmative recruitment and i think, everyone regardless of background should have equal opportunity, we would not want to deny equal opportunity regardless of waste -- race. i do not want people who are qualified or better qualified being denied that opportunity. we will see how the supreme court rules on this case, the people of good hearts and good minds can come up with a proper way of addressing the need for young people, all people to get a quality education. i do want to say that my plan for getting the budget in order is pretty clear. number one, eliminate obama care and it will save over $1 trillion. second, the government has identified 50 billion -- $50 trillion in energy resource

overlap. number four, have a more competitive and comprehensive tax code with fewer reductions. there were be over $23 billion coming in every year. that is the way to do it. making cuts and growing the economy. >> time for our closing statement. by order of appointment, mr. allen, you go first. >> thank you for the opportunity to have this debate. the principal election is going to determine the direction of our country. if tim is in, he will be in there for the same folks he has been -- the same folksy has supported all these years. i want to see change in washington, positive constructive ideas to get this country going in the right

direction. i believe that we should get united behind the mission of sending the message to the world of america going open for business again. anybody who pays taxes should be on our side unless they want to pay higher taxes. if they use electricity, there will be on our side. if you want more affordable electricity. if you drive a car and do not like the fact that you pay $30 more when you fill up, you will be on our side. if you think that doctors and patients should be making healthcare decisions rather than panels of bureaucrats in washington, you should be on our side. if you want a job, the approach i have been advocating is proven to work over 300,000, when we are working together. republicans and democrats making regulations more reasonable, taxes lower, freezing college tuition to make sure it is accessible and affordable to virginia.

indeed, if you care about the future of your children or grandchildren, you should be on our side. i hope to be your voice in washington, the hard-working taxpaying families of virginia need someone on their side in washington. i hope to be there working for you and making sure that all americans, no matter their background, have that opportunity to cast their dreams. >> the economy is ready for a break. there are positive signs from last week, but i think that congress is the ankle weight right now. i think that the in it -- toge. the decision to filibuster and block a veteran jobs bill and farm bill before election day is a perfect example we have to put new ways of thinking in congress. we have to fix the economy by investing in infrastructure and expanding educational

opportunities and leveling the playing field for small businesses but we can't get there if congress is fiscally responsible and doesn't work together. on the fiscal side i have a record. governor during the worst recession since 1930's, cut by a billion in spending, cut my own pay as lieutenant governor and governor to try to two the right thing to keep virginia leading the way among other states. we were taupe of all of the accolades of states whether i when i was governor at a very difficult time. my opponent has a different record. he was in the united states senate and as i indicated started with surpluses and budget in the best shape he ever had and by the time left, it was in shambles. he wrecked both sigh of the balance sheet and hasn't said anything today about what he would do to get it back. we also need find people who know how to work together. here in richmond as governor as a tough time, it was about working together to ban smoking in restaurants and bars, put a billion dollars into the chesapeake bay, preserve open space. we worked together even when we disagreed. but my opponent has a different

track record. when he was governor he famously said his job was to enjoy knocking democrats' soft teeth down their whiny throats. more to the point when he went into the senate and there were everyday efforts to find compromise led by virginia's senior senator john warner in the gang of 14, he did not only not join those efforts but ridiculed them saying we don't need to compromise. we need folks who know how to compromise and work together. we will not move forward as a nation if we can't join together. that's the way i have served and that's the way i will serve if i have the honor to be virginia's next united states senator. thanks. >> thank you very much. mr. allen, mr. kaine, i want to thank you both of you for taking part in a very vigorous debate this evening. i want to thank our audience both here and at wcve and at home for watching and try to remind everyone to vote in what is going to be one of the crucial and critical elections in america. i would like to turn it over to our host, bill fitzgerald from wtvr.

>> thank you, bob. it's been a vigorous debate and this program has been brought to you in part by aarp virginia, league of women voters of virginia, wtvr cbs 6 and pbs, community idea station. we want to say thanks again to the candidates for appearing together on the stage tonight. we heard a lot about social security, medicare. many of the issues voters of virginia are facing. we want to thank those voters and our live audience for taking part this evening. don't forget, election day is now less than a month away. on behalf of everyone who brought this debate to you, i'm bill fitzgerald. good night. >> c-span is bringing you live house, senate and governor's debates between now and november 6th, including tonight, live from charleston, west virginia, the debate for the state's governor. mr. tomlin won a 2010 special

election against mr. maloney. coverage from west virginia starting at 7:00 p.m. tonight here on c-span. and we will have live road to the white house coverage, president obama campaigning in ohio. he will be at ohio state university in columbus at 5:00. we will have that live on c-span and follow that with your phone calls and reactions. >> look at what president obama did on the budget, nothing, except ro and spend. as a result of the president's abdication supposed leadership's -- abdication of leadership, our credit rating was downgraded for the first time in our nation's history. >> we laid out a $4 trillion reduction. ladies and gentlemen, these

guys vote against everything. no, i mean it. they say they do not like our plan. ok. i get that. what is your plan? >> thursday, paul ryan and joe biden will face off in their only debate. you can watch and engage in c- span with our live debate preview starting at 7:00 p.m. eastern, followed by the debate at 9:00. your reaction, calls, tweeds and e-mails following the debate. >> as i watch on c-span the various congressional hearings and congressional deliberation on policy, also information's put out by think tanks here in washington. i like the shows on assets -- unlike the shows on sundays at

8:00, -- i like the shows on sundays at 8:00, the discussions about the books. wesley grumman's watches c-span on comcast. c-span, brought to you as a public service by your television provider. >> 15 years ago today, c-span radio was created by the cable- tv industry as another way to access our public appears -- public affairs programming. you can listen in washington and the baltimore area and at 90.1 fm, ex-im satellite channel 1194 c-span radio. you can all now less -- you can also allyson on your hand-held device. -- also now listen on your hand-

held device. the race for the senate in montana is a tossup according to a report. this debate isn't courtesy of montana pbs. >> good evening and welcome to tonight's u.s. senate debate by billings gazette communication. i'm steve prosinski, editor of the gazette. many thanks to the chancellor, director of university relations, and many others, for providing a perfect venue for this exchange of opinions and ideasbetween denny rehberg and senator john tester a democrat. three veteran montana reporters will ask questions. montana public broadcasting and c-span are broadcasting tonight's debate.

yellowstone public radio are broadcasting our forum also and the gazette is streaming it live on gazette.com. our timekeeper is a 20-year-old senior from billings, majoring in accounting. he also is a student body vice president. each candidate will have one minute to answer a question, then the other candidate we have one minute to respond. a 30 second rebuttal will be allowed. each candidate will have two minutes for a closing statement. before we go to the questions, we all ask you hold your applause until off the closing comments. interruptions will eat into the time for the candidates and their responses. we're all here to listen to them, not each other. please respect them by holding your applause until the debate

has ended. thank you. now to the question. we'll start with a question for senator tester. you'll have a minute to respond and representative rehberg will have a minute to comment and senator tester will have 30 seconds for a final response. >> good evening senator tester. i assume on november 6th, you will vote for president obama. i like to tell us why it's important and why his reelection and your reelection is good for montana. >> if you take a look at what he's done with osama bin laden and going things in the middle east. he has taken care of the war on terrorism in a big way. the's been positive for country. he took over the country was hemorrhaging 800,000 jobs a month. the job growth isn't where we

want it to be we are starting to see job growth in the country and that's been positive. as far as myself is concerned, i think the level of responsibility and accountability that i brought to washington d.c. or in transparency are measured. i was the first person to put my schedule online, first person to do an audit and carry bills. they make the government of washington, d.c. look a lot like montana. montana's government is open. not only for folks like you mike and folks in the audience to be able access database that's tell people what's going on in washington d.c. we are 2,000 miles away. often, access to those databases lets people know what is going on. it is critically important. i will not get into infrastructure or veterans. my time is up. >> thank you, senator rehberg, one minute. >> there are two paths we can take this in country.

senator tester and president obama have taken one path. he's voted with president obama 95% of the time. what have that given us, it's given us healthcare reform. it did not reform health care. it added more people to a failed system. it gave us the failed stimulus. the only shovel ready project really funded in a large sort of way was adding additional trillion dollars debt on our middle class. it also gave us not necessarily an energy policy but an environmental policy. you don't have to look very far down the veto to see the closing plant. it will cost us 35 jobs. it's going to cost the city of billings over $10 million a year in income in the surrounding area. it is going to add as much as 25% to our utility bills. that is the equivalent of shutting off the electricity to 100,000 homes.

that's entire city of billings. economics kind of we've gotten from the failed policy of president obama and from the failed policy of senator tester. >> congressman rehberg didn't answer the question why we should vote for him. had a broken healthcare system and we had to make some changes, and making sure people with people with preexisting condition have coverage. we have to hold insurance companies accountable. as far as the stimulus package goes, the shiloh road congressman provides avenue to get to one of your developments. it has been pretty important to billings. the fact is that the work that was done, is critically important we're going to move forward. i hope to get to that plant somewhere in here, or i will address it later on. >> thank you very much. now tom to your question for representative rehberg. >> yes representative rehberg. you have criticized american recovery and reinvestment act, our also cut the ribbon on a road project that used stimulus. in february 2009, you credited yourself for securing $42.5

million for montana project and that year consolidated appropriation bill, that's according to your website. the very next day, you cried the $410 billion for wasteful spending. you have mostly voted the party line and accused your opponent of voting with barack obama 95% of the time. you also said we need to roll up our sleeve and work with solutions and put partnership aside. that comment was made when you asked democrats in joining you to invite barack obama back to about the opportunities and challenges facing our great state. representative, why should montana trust that you're the conservative that you now suggest that you are? >> if you think about the budget in america, we spent as much as $4.5 trillion. the difficulty is we bring in

$3 trillion, and spend $4.50 trillion. we can set priorities. there's no reason we can't create an economic stimulus that's going to stimulate the economy. these are the "washington journal" numbers. a trillion dollars borrowed against the debt, 12 cents on a dollar went to stimulus. but the difficulty, it went to things that was pure spending. if i go out on my ranch and they need to buy a new stock and it cost $15,000, i can assume i can return. otherwise, it is a pure expense. that's the problem with this stimulus. it was pure expense. there was stimulative efforts, but it didn't create the jobs.

it wasn't timely or targeted, it wasn't temporary. it doesn't stimulate the economy the way it intended. there were other ways to do it. could have done reduction in corporate tax. could have done it by extending the payroll tax on employers and employees that would have cost the same trillion. that would have put money in the pockets of every small business in america -- the chiropractor, the florist, the engineer, the farmer. they didn't get that. there was a way to stimulate the economy. this was not the way to do it. >> senator tester one minute. >> the recovery act, you want to talk about what it did. it gave $500 million in tax relief for working families and small businesses. across the board, $500 million, that's for the state of montana by the way. that is not for the whole country. that's for the state of montana. $500 million.

it made it so emergency folks like policeman, and firefighters and teachers can stay on the job because states were in bad a shape. thankfully montana was governed by brian, he had the state in a better shape. overall, the states were in as tough a shape as the federal government. we talked about shiloh road. the infrastructure projects all over the state. i talked to a worker in building curbs and working on water systems when projects being awarded. he said i wouldn't have had a job. we were losing about 800,000 jobs a month before the recovery act. after the recovery act, we saw that flatten out. we were on the cusp of a financial meltdown. >> nobody suggested we will not spend money. government is necessary. we want police and fire, those are expenses. if it's going to stimulate the economy, you don't do it one time expense. you have to build, and grow and create jobs. how do you create jobs but

unleashing the small businesses of montana and america. you don't do it by piling more debt. we're in fourth year over trillion dollars debt in this country. adding to our debt. since he's been a united states senator it doubled from $8 trillion to $16 trillion. we cannot continue down that same path. >> now question from jackie to senator tester. >> senator, this current session of congress has been dubbed by the pundits as the most partisan least productive in memory. even with the looming fiscal cliff and we're talking about the end of the bush era tax cuts, members of congress can't come up with a solution. why then should montana return you to the u.s. senate? what are you going to do to advance your vision for montana? aren't they just voting for more of the same for another six years? >> well, jackie, thank you for the question. i will tell you, it is very partisan in washington d.c.

it is very distressing. the press has reported correctly. in montana, where we have seen communities built together, it is distressing. quite frankly, washington d.c. can learn a lot from us in montana. we worked together and get things done. we put things aside. the jobs fact is a prime example, by the way. your question was about me. why? i will tell you why, i have worked across the line time and time again. whether it's to get capital available for small businesses. whether it's to delist wolves, work with mike simpson representative out of idaho. making sure banking regulation fit america. i will continue to work with

people and honest fair way. that is the way we do in montana, truthfully talking about the to challenges out there. we will come together. i have confidence after the election, we will come to an agreement. democrats and republicans. good ideas, both sides of the aisle. that's how this problem will be solved with the fiscal cliff. >> representative rehberg, one minute. >> i am terribly disappointed with my efforts with the farm bill. i have done everything i could to move it forward. it did not come out of committee. that is why i oppose president bush, that's why i voted against the ryan budget. i didn't think it protected medicare enough. i worked across the aisle. i were to build a caucused with a liberal democratso the specific purposes of three for nutrition, education and early childhood and development. that's why i suggest when you vote with barack obama 95% of the time, you can suggest that you're bucking the president, when you vote for it. everybody in montana believes in that position, and so do i, on the wolves. ultimately under the decisions that mattered most, on things like a failed healthcare reform, on a failed stimulus and on energy policy voting for cap and trade, my opponent has voted

for barack obama not bucking his own party, not showing the independence necessary to try and build a more secure future for the people of montana. he stands more with barack obama, i stand more with the people of montana. >> totally ridiculous. i'm going to tell you the fact is if you look at the record, for the last 18 months, the congressman wanted to run against barack obama. they try to morphed me into barack obama. barack obama don't want to see the exxon pipeline built i do. barack obama wanted to see the bailouts, i voted against the bailouts. the list goes on and on. i put montana first in every decision i make because that's what's most important to me is taking montana's good ideas back to washington d.c., converting it to legislation, and getting it passed. >> now question from mike dennisson to represent rehberg. >> good evening congressman. you mentioned medicare, you criticized the medicare portion in the affordable care act, you

voted against the ryan budget in his medicare plan. what's your medicare plan? i haven't heard much about it? >> you don't begin by taking $716 billion out of medicare. it is already a failing system. we have to do everything we possibly can to make it stronger. by taking $716 billion out of medicare, all you doing is forcing seniors to go under obamacare which will not work. it makes it much more difficult for doctors and hospitals to provide services to our seniors. the reason i voted against the ryan plan because it was a top- down idea. it did not protect medicare recipients. my number one goal is to preserve and protect medicare for those that are on it. you don't do it by taking $716 billion out of medicare and hope that you will solve the issue or solve the problem. by paul ryan being selected as the nominee done what it will do.

it has begun a 50-state debate. over the course of the campaign, you will hear more about medicare reform. ultimately hope to bring the ideas of montana back to washington. rather than a d.c. top-down solution. that is what i thought the ryan proposal was, and certainly is what the obama plan is. >> senator tester, one minute. >> only in washington d.c. when you take excessive payment to insurance payments and eliminate waste, fraud and abuse, that will be called a bad thing. the fact of the matter is, not one benefit will be cut to medicare recipients. not one benefit. the fact of the matter is,we have been reimbursing insurance companies and provided no benefits to our seniors. it's time to sop that reimbursment and make this program good for generations to come.

the i know the congressman doesn't like the affordable care act and obama, it extends medicare for eight years. we need to continue to look for ways to make medicare stronger. it's a safety net. it's important for our seniors. works for our seniors. we ought not become destroying it. quite frankly, you have not stepped forth with ideas on how to make medicare solvent for the future. >> representative rehberg, 30 minutes. >> you don't extend medicare by taking $716 billion out. did you hear what he said? he said benefits were not going to cut. that's not the issue, the issue is doctors and hospitals will not be fairly reimbursed for seeing seniors. if president obama and senator tester say you will not lose your insurance under the healthcare reform, no, the problem is nobody will be able to give you that insurance.

when they say you will not lose the doctor of your choice, the difficulty isthe doctor may not be able to see you. we must put that back by repealing obamacare. if by putting the money back into medicare, we can make it stronger and last longer and begin serious discussions of a bottom-up solution. >> question from tom to senator tester. >> yes senator tester, you frequently referred to as the only working farmer in the u.s. senate. trade issues by montana farm group, you have voted no. trade is important to montana because of the state's $1 billion year weed industry sell 85% of its product overseas. the state's billion dollar plus cattle economy is depend on beef. you opposed the south korea free trade agreement. korea bought $189 million in non-farm products from montana in 2010. second only to canada. you voted against free trade

agreements against panama and columbia. explain your opposition to these agreements. >> the trade agreements have to be fair and free. quite honestly we do have tremendous opportunity especially in state of montana. we raise the best beef, the best livestock, and the best grains in the world. but they have to be fair. we cannot allow other companies to dump their products on us. that's what i felt those free trade agreements would do exactly. i'm not opposed to trade at all. it's important that we do have trade but it can't be at our producers expenses. i felt those trade agreements were skewed toward the countries you mentioned. that's why i opposed them. >> representative rehberg, one minute. >> towing the party line. the democrats asked him to vote against it and he vote against it. i showed the independence.

i traveled to south korea. i voted for it. panama and columbia, and it was told us by them to listen and learn about the trade that could be done with them. you know what's interesting about that, since that time we've increased our agricultural exports to montana by 200%. i also travel to australia, and learned it was not in the best interest of our livestock producers. i bucked my own republican party and i voted no, the same is true with cafta. central america free trade was going to hurt our sugar producers, right here. i voted against it. i showed the independence of traveling and learning and listening and finding out what is in the best interest of our producers. rather than towing the party line,i showed the independence of voting for those that were good for us and against those that i thought hurt montana. i didn't stand with my party, i stood with montana. >> senator tester. >> very quickly, i will say this, president obama wanted those trade agreements

congressman. you stood with president obama on those trade agreements. i chose to do what's right for montana's producers. what we're seeing now are prices where we can afford a farm bill where farmers and ranchers don't have to go to the governmenttor get their check and they can get it from the marketplace. >> now, a question. >> congressman, i like to go back to the claim that your opponent vote with president barack obama 95% of the time and you said it repeatedly tonight that you're a maverick and you're an independent. the "wall street journal" called you out on that earlier this year. they called you more conservative than 81% of your colleagues in the house. congressional quarterly say you joined your gop colleagues more than 93% times each year. how is that being a maverick

when clearly you're partisan. can't the argument be made that you're not effective with your own party? you talked tonight about the failure to get the farm bill out of the house. why should montana send you instead to the u.s. senate? >> there's a difference between voting with barack obama and 95% of the time and voting on what i believe is the right interest. when he talk about agricultural producers, i heard from montana because i traveled all 56 counties continually that they wanted the trade practices with south korea. that they wanted the trade practices, our wheat producers were losing ground with canada in columbia. they told me that. that's why i voted for those. while at the same time, much to my party, i did in fact, vote against the free trade. i'm fighting for the farm bill.

i do not agree with my own leadership. i'm doing everything i possibly can to bring that bill on to the house floor. on the republican side, think given me chairmanship in one of the appropriations subcommittee. because i understand the human needs and i listen and learn. but i don't stand with president obama 95% of the time i stand with montana 100% of the time. >> it sounds to me you stand with obama quite a bit of the time because of the trade agreement. montana is a big state. it is nothing out of the ordinary to go visit everyone. let's talk about that farm bill. let's talk about that farm bill for a second probably one of the most important jobs the congress has to do. the senate passed the bipartisan farm bill back in june with almost three quarters

vote. it gives food security for the people in this country. it is a bill that make sense. it goes over to house, the congressman gives it lip service and it doesn't go further. i would still be in session with the senate until we got that farm bill passed. let's talk about the ryan budget for a second, it's important we talk about it. he talked about how he opposed it, he took the ryan budget numbers and that's what he budgeted off of. that is what he did in his subcommittee. let's be honest with the people of state of montana. let us be accountable to them. let us talk about the decisions you have been making. you have not been responsible. >> representative rehberg, 30

seconds. >> anybody with the room believe i do not want to see a farm bill? you agree with it and i agree with it. if you did travel around the 56 counties and you did listen to those having livestock disaster assistance, we passed a disaster assistance livestock bill to the house of representatives that you couldn't get it through. you held it hostage for your five year farm bill. i want a farm bill as well. we agree on that. if you were listening to the people of montana, you know they wanted livestock mitigation. we could have done it. it passed the house of representatives. you didn't have the leadership ability to get that bill through. you played politics by holding it hostage. >> don't i get a 30 second rebuttal? >> that was his 30. >> well. [laughter] >> sorry, rules are rules. now it's time for each candidate to ask questions of the other candidate. representative rehberg what is your question for senator tester. >> i will ask the question, you support president obama 95% of

the time. that is the major issues. that is not necessarily standing with the people of montana. if you listen to the people of montana, they did not want obamacare. they did not see how the stimulus will work. they did not think the epa bureaucrats in washington should shut down the plant. do you think president obama should be reelected? >> the point is congressman, you're running against me. this is the race. you're not running against president obama. you could have done that, but you chose not to. there's plenty of differences between myself and barack obama. tonight i'm trying to starting to figure out there's similarities between the congressman and barack obama. the fact is, if you go down the list, whether it is trade agreements, whether it is making sure the bailouts do not happen -- we have set the standard and we've set the standard by listening to montana and doing what montana think is correct first. that's the bottom line. he can try to morph me into barack obama because that's what he wants to run against. look at the record, whether it's for veteran and infrastructure and transparency, the list goes on.

these aren't bills i just voted for, these are bills i sponsored and carried and i do want to talk about that farm bill for a second. that drought assistance you talked about, previously you say you got get that pass through the senate, the drought assistance that he wanted cost taxpayers money. the farm bill save money. >> thank you senator tester. mr. rehberg, one minute. >> i don't need to morph you into barack obama, you did it all by yourself. you listened to what he wanted and you voted for a failed stimulus and voted for cap and trade which is nothing more than energy tax. it is going to raise the cost of our utilities. it's going to cost us jobs and oil gas and coal country of eastern montana. you supported the epa and their regulation that they're going to shut down the corette plant. that is going to cost 35 jobs. it is going to cost $10 million annually to the city of killings. it is going to increase your utility costs as much as 25%. it will mothball plants around the nation. that's not being independent voice. i've tried to be an independent

voice for montana by bucking my own party when necessary and supporting my party when necessary. but ultimately traveled to the 56 counties to find out what the people of montana wanted me to do. that's why i voted against the president's healthcare reform because it's not a reformed healthcare. it is necessary we must reform healthcare, if you leave defense of medicine out of it, you haven't done a thing. ask the people of montana, they were told insurance premiums will go down $2500, they went up. it cost every member in montana $5000 for your experiment supporting the president. >> senator tester you have 30 seconds. >> i will say this, any time jobs are lost, that's a bad deal. we're talking about epa regs been on the books for 20 years. with a talking about a company that made $1.60 billion in profits last year. the fact, they should invest in that plant.

the problem is, congressman, you bring up stuff and hope it sticks. i did not vote for cap and trade. i voted for procedural motion to talk about energy policy in this country. we need to have a debate about that energy policy. we need to have a debate on cap and trade too. to make sure it work or not work for this country. there's plenty of things we need to debate for him to stand up here and list off a litany of things and pull them out of air, i guess it's a baloney. >> it is your turn to ask a question. >> thank you steve, congressman you've taken 15 trips in your tenure in congress. taxpayer-paid trips. trips to australia and south america and europe and south pacific. you've eaten in castles and on boats and meal boats and gin bars and dealt with lobbyist. i'm sure the lobbyist and special interest got their money from taxpayer trips.

what exactly do taxpayers of montana get? >> every trip i've taken has been the benefit of montana. i traveled to australia to find out why it was best of interest for me to vote for the australian free trade. and why they could make the endangered species act worked and we could not. why it was necessary to have the vote that i did. i learned about south korean trade. why did i travel to places like europe? i was honored in a bipartisan fashion for leading democrats in the house to give a keynote speak at normandy to honor our world war ii veterans. it was at the presentation of a new memorial. you want to talk about lobbyist, you're the number one recipient of money for lobbyist.

i look out at this room. everybody out here is represented by somebody in washington d.c. i accept their information, you accept their cash, $1.8 million in the last two years from lobbyist and wall street. i learn from people and listen to people, i don't take their cash while attacking them on other end. >> it's interesting for a guy who hit $25,000 in lobbyist money and he should have reported it and did not transparent about it. for a guy who has taken off tens of millions of dollars of money ad hoc. who's bought commercials for the last year in a half trying to define something i'm not. it's rich that you point this

out. look, you are the one that was a paid lobbyist. you were the one that told lobbyist that you depend on them to make your decisions. you the guy who said the revolving door isn't a big deal. it is a big deal. it is tough when you point a finger at somebody and three are pointing straight back at you. >> representative rehberg, you have 30 seconds to close. >> everybody in this room is represented by somebody in washington d.c. that provides information. i'm not so arrogant to believe that i know everything. i don't have to travel all 56 counties and learn about nuclear and wait refinement. i went to france and traveled

across france. i am on the committee that has something to do with that. i traveled around america. i went to georgia and alabama to learn about coal fire generated plants from their perspective. i learned about coal-to-liquid plants. i done everything i potentially can to educate myself but also to listen to people around america and around the world to ultimately make better decisions rather than going back to my farm every weekend. >> thank you congressman. question from mike dennisson to senator tester. >> senator tester, we've heard a lot tonight about what people are against. i want to talk about what you are. talking about the fiscal cliff. we have deep spending cuts and

tax increases, what is your approach -- why is your approach better for the economy and why is your approach better than your opponents approach? >> i don't know your opponent's approach. you are going to ask a question to him in a second. the approach has got to be bipartisan. we've got to work together to solve this problem. we're talking about problem in the debt and deficit. the fiscal cliff comes at the first of the year. there is no doubt that if we don't work together, we are dead in the water. mike, there have been plenty of proposals out there that make sense for this country. big broad based proposals. talked about many of them. they're the simpson-bowls and the list goes on. all sorts of gangs. the bottom line is those templates can be put together. it has to have everything in it, everything has to be addressed. people need to work together. i think there's critical minds in senate to get it done. when we talk about sequestration and the fiscal year, that was imposed on us a bipartisan way to get it done.

we have to work together. it is easily fixed. like i said in the beginning, it's what montana do naturally. in washington d.c., we need to learn from montana. >> thank you representative rehberg, one minute. >> first thing we need to do is repeal obamacare. that will be the first action that we need to work on a bipartisan solution to the farm bill. what we really need to do as i travel around montana, the number one word i hear more than anything else, we need certainty. we need to know what our taxes will be. i done everything i possibly can to eliminate the death tax. that is because of my own family situation, where we lived through the death tax and lost 1/3 of our farm. we have had to rebuild of on borrowed money. we need tax certainty, we don't need regulations continually dropping down. sequestration, i voted against subcommittee, to have 12 people go behind closed doors to solve fiscal crisis in america. that is ridiculous. we tried that with 45 of us. it wasn't going to work in the first place. sequestration is happening because senator tester supported sequestration and it will create a crisis at the end of the year. this is solvable. we can do it. you know what's interesting? not only do they take $716 billion out of medicare, another 2% will be taken out of america. america cannot withstand that kind of reduction to medicare. it is going to destroy the system. sequestration can't happen. >> senator tester 30 second. >> i am probably responsible

for the drought in the southwest as well. >> here's the deal congressman. you voted against sequestration and you voted two years in the budget. you vote for this country to default on our debt. just about every economist in this country said that would have sent us into a depression immediately. that was a year ago last august. the bottom line is, we don't start working together in washington d.c., we're going to continue to have single digit approval ratings. i would be right there voting with everybody else in the single digit. we have a good people back there that have worked together on other issue that's are critically important. cooler heads will come together and we'll get that problem solved. it will be solved in a way to works for the country short term and long term. >> congressman, what's the biggest lie that's been told about you in this election cycle? what will you say to set the record straight? >> i haven't really thought about the biggest lie. what i really think i want to be portrayed as somebody who cares deeply about montana. i'm not sure that comes through in the advertisement against me. i listen and travel around the counties. i have tried to be an independent voice. what i would have done, i would

have tried to extend the payroll tax on employers and employees. every small business could have benefited from that. that includes the newspapers, radio stations, and tv stations making all the money from the ads against us. i wanted tax certainty. i deeply care about the future not just of our children but i look at my mom and dad who are in their golden years because the investments are not coming back because of the recession and we're not turning this economy around as much as possible, i care deeply about trying to change the direction that we're talking about these two avenues. the avenues of my senator opponent has taken and myself who believes there's a different path and better path one that will create a better opportunity for not just my children and grandchildren but my parents as well. >> i definitely want to keep coming back to recovery act. there was $500 million for tax

relief for working families. what creates economy? demand. that $500 million went to working family pockets. there's plenty of lies said about me from the beginning to end. for the last 18 months, we had continual immersion in them. the most interesting one was the one that gave me five fingers on my left hand. i thought i was going to get them and be able to play basketball again. the wide receiver. last week, they sent out a flier that had my face on the picture on the body of rick santorum. it didn't take long to figure that out. the bottom line is this, i pride myself in taking montana back to washington d.c. and working with people. i don't care if they're democrats or republican or independents.

a's too bad we didn't have libertarian on the stage tonight. i don't care if it's libertarian either. the bottom line is people work together. they have tried to make me something i am not in many areas. you get things done when you work across party lines. things get done in the middle, not on the fringes. >> representative rehberg, you have 30 seconds. >> if you want to talk about false advertising. they put my head on a silver platter in one ad. one ad shows me as the grim raper. everybody is playing that game. it is not unique to he, and those attacking him. what i find interesting when we talk about bipartisan, they talked about leadership and getting things done, what about the fact the senate hasn't passed a budget.

frankly, that is illegal, but that does not seem to matter. let's see a bill. let's see a budget. let's roll up your sleeves across the table and do it in a transparent way. you know what's interesting to me? over the course of 2009 when they had single party rule, they passed obamacare, they passed stimulus and they passed additional $1 trillion in spending. that is $3 trillion in new spending. and the appropriation committee never met once. we didn't have a single hearing. that means no public input, that means no opportunities for amendment. that did not give us the opportunity for you to have your say. that's not transparency. that's what we got with single party rule. we haven't had a budget out of the senate in over three years. >> we have. you voted against it. >> now, we have a question from

jackie to senator tester. >> senator, congress designated a number of tax deductions. people call this loopholes, things like market interest or charitable contribution. it allows contributions to 4 01 k's to be a pre-tax. lawmakers often talk about closing loopholes but it often means standing up to special interest and this includes the middle class. do you favor closing loophole and if so, specifically which one? >> that's a great question jackie. i will tell you if you take a look at the simpson-bowls proposal brought out, it talked about income tax specifically about income tax brings in $1 trillion. there is about $300 billion put out. look, we can reduce some of those tax earmarks and get down to a point where quite frankly we can lower the rate and actually bring in more revenue and make it more simple. i think that is one of the challenges with the debt and the deficit. it is an opportunity there too. i think the housing deduction is important. it's critically important economic driver. i know there are things in that bill. there are tax earmarks that

have been on the books to the big oil companies. i'm talking about the drilling cost. i'm not talking about tax breaks been in the books since 1913 for the exxons of the world. those could be taken off. they are doing fine. on the other side of the coin, the folks out there and doing the wildcatting, the folks out there making difference, let's look at those. let's take a look at what drive our economy and what's not necessary anymore. if you take a look at -- my time is up. >> representative rehberg, you have one minute. >> unlike my opponent, i do not support simpson-bowles. how many times have you heard, "if you would just let us raise taxes, which would cut spending"? what the simpson-bowles does -- it increases gas tax by 15%. it eliminates the home mortgage deduction. it was a promises made when you took out a mortgage and the value of your home maybe in relation what you pay in your tax.

i believe in flat tax. i think ultimately we could move toward the flat tax. we need a simpler system. we need a tax system that is easily done and easily understood and i will begin by helping those senior citizens with their income taxes for the purposes of making simpler for them. i got to tell you, people support reform, as long as it doesn't change anything. it will be difficult to work towards tax reform. i'm fighting for a flat tax. that is the best way to go. >> senator tester. >> the question becomes housing deductions and charitable deductions study maintain when you have the flat tax. but that is not the point. i will say something that we agree on. if we play politics with this, we will never get anywhere. we have to work together on this to reform our tax structure in this country.

if we put good heads together, we can get rid of the deductions that make no sense whatsoever, and they do not drive our economy. it would help us pay down our national debt. >> thank you, now a question from mike dennisson to representative rehberg. >> let's keep talking about taxes. you mentioned the federal and state taxes or you call the death tax and your wish to repeal it. the current tax does not apply to any inheritance income less than $10 million. also family farmer ranch can avoid this tax. the amount in federal debt, why is it a priority for you to cut the income taxes for the few folks inheriting more than $10 million? >> i will correct your numbers at the end of this year, it goes back to a million dollars. and it goes up to 55%. if you are trying to enrich yourself on inheritance, you are going to have an opportunity to pay your fair share. you're either going to pay a capital gains tax or income tax. why do the federal government

believe it's necessary to cut into the ability of a family put a business together to generate tax revenue for their public officials? why do they feel it's necessary? it is not necessary. it's an insidious tax that hurts small business. it doesn't matter whether it's 10% or 55%. 10 million or 1 million. it's not necessary and it's not right and it should be eliminated. >> senator tester. >> take a look at the fiscal condition we have in this country right now. we have to make choices. my choice is to make sure we make that $5 million per person, $10 million per couple, 35% tax rate permanent. index it so it doesn't drop back. what's really important with the inheritance tax and death tax, it's bounced all over the place. it's $5 million one day and $2.5 million the next and it's been bounce all over. you cannot plan for that. if it's made permanent, people

can plan for it. people in agriculture can plan for it. small businesses can plan for it. they can put life insurance over that figure. it makes sense for them to do it. it's got to be made permanent. 5 and 10 is a sweet spot. it exempts almost everyone. almost every farm and flanch this state. >> representative rehberg, 30 seconds. >> tax problem in this country is spending problem. if you listening to what he's suggesting, he's suggesting we need to continue tax of a death of a loved one to feed a government that's out of control. why don't we control government first? that is what i support. i believe that we should put into permanent effect the tax relief for 2001 and 2003. i believe death tax should be zero. because it gives certainty. that's the biggest thing i hear as i travel around montana, they don't know what their taxes

will be. they don't know the effect of obamacare on them. is it going to cost them more to provide health insurance for their employee. is the employee possibly going to lose their health coverage from their employer? the whole uncertainty is created by the fiscal cliff because they have backed introduce a spending corner that is going to be so hard to dig our way back out of. now is the time. >> time is up. >> now a question from tom to senator tester. >> yes, senator. in april of 2011, you removed wolves from the federal and endangered species list. that happened in five states, including in montana. it included a rider. the rider -- the move was decried by environmentalists, saying it was a self-interested political move to endangered species act. some fear it opened the door for other lawmakers to endanger species act protection. what do you tell montanans who voted for new 2006 but oppose your act actions to delist wolves?

>> there was a recovery effort on wolves and it worked. we ought to be doing back flips on that. they are recovered. now let's manage them. they no longer need to be on the endangered species list. let us manage them like we do deer. it took a lot of work to get this done. there were a lot of folks out there -- the administration being one -- that really didn't want to see this happen. we worked and we worked together with folks on both sides of the aisle. we worked with conservationist that understood that wolves will recover. we worked with folks with the livestock industry and this was the right thing to do. it's fine to make decisions but you need to go back and monitor those decisions. it really goes back to jackie's

question on earmarks. we ought to go back and monitor and see what is not doing right. we monitored the wolves on the endangered species list. we got that done by working with republican out of idaho. >> representative rehberg, one minute. >> wolf recovery is a perfect example is what's wrong with the endangered species act. i worked in 2005 when we passed legislation in the house of representatives to reform the endangered species act. so we know where the end zone was so we would know when we recovered a species, it will be delisted. this was not a decision made by obama administration. it was a judge who reversed the position who changed the future of wolf recovery. it changed the goal posts. what we need ultimately need we needed an endangered reform act. it's not working for the betterment of the endangered species and there's nobody in this room, nobody in montana that wanted to endangered

species. that want species to disappear from the face of the earth. the point is we need certainty. we need to work together to delist it. turn management back over to the state. the solution and compromise came up was stopgap. it should be delisted. it still allows the u.s. fish and wildlife service to have an influence. the management should be sent back to the state as we have proposed in my legislation. >> the problem is, legislation didn't make it out of committee. still setting there. we got a bill we can get bipartisan support for and get passed. it was done after talking with sportsmen and livestock producers and conservationist across the board. it was the right thing to do for the wolves. it was the right thing to do for montana. we got it done. >> now a question from jackie from representative rehberg. >> congressman, i just can't leave the topic of taxes. the argument against raising

taxes on the wealthy it's going to hurt the job creators. according to the montana department of revenue just under 1% of montana household hit that threshold $250,000 a year. for 2003, montana legislature cut the top marginal tax rate. but economist can find no evidence that this tax cut has led to more jobs. jobs grew in the 1950s and 1960s when the marginal tax rate were higher than they were today. where are the job creators as the result of tax cuts for the wealthy? >> tax and cut, tax and spend? which is better? it tells you if we borrow money -- why government feels it need to take our money away from us? if we have opportunity to invest it in job creation? why can't the government learn to balance its budget? why can't the government tighten its belt like everyone out here in this audience has to but this government does not want to.

we're not going to be able to cut spending enough to balance the budget. we need to grow the economy in the way you grow the economy, you take every last dime out of the economy. you let that money stay in and circulate and grow and create the jobs necessary and build that more secure future. you cannot continue to tax your way into prosperity. you can't spend your way into prosperity. small business is the solution if you get the government off the backs. you can't in fact, have more people hired, keep those that already have jobs and expand our economy. you don't do it by raising taxes during a recession. >> well, the fact is if you want to talk about job creation what creates job. you right, it is the small

businesses. it's not the multimillionaires like yourself that create the jobs. it's the small business people and they need to get the deduction. they need to get the reduction. working families need to get the reduction. the work families are the folks that create the demand that cause more manufacturing and more economy. quite honestly, we're not talking about tightening our belt. the belt will be tightened in a battleground -- big way. the folks making millions and millions of dollars ought to be contributing tot coiffures. >> representative rehberg. >> feed the beast. more government, bigger government, continue the same government. rather than trying to create the efficiencies, the effectiveness can be made, all they want to do is add more money. i can solve the fiscal crisis. i have legislation introduced that will cut $1.4 trillion. we have social security and